How Much to Pay an Administrator or Executor

What Are Executor Fees in Pennsylvania?

How to Calculate Compensation for Estate Administrators

In Pennsylvania, there is no fixed formula or fee schedule to determine how much the executor or administrator of an estate is allowed to be paid

Generally, someone appointed to that position, and who works to settle the affairs of an estate, is entitled to be compensated for services rendered to the estate. If the issue becomes a matter of dispute – for example, if the heirs or beneficiaries object that the Executor or Administrator has been paid too much – the judge will decide the appropriate amount for the Executor’s fee.

Pennsylvania law requires that compensation be “reasonable and just” and permits the fee to be calculated on a graduated percentage. Thus, the most common method for determining the Executor or Administrator’s fee (and the attorney fee) is based on the size of the estate. It makes common sense – for a bigger estate, more work and responsibility is likely, and for a smaller estate less work and responsibility might be required.

Though, this can be a crude tool and imprecise method for measuring the amount of work to be done. There can be a large estate that is simple or a smaller estate that is more complicated. Many factors affect or determine the extent and complexity of the executor or administrator’s job:

  • The proportion of probate assets versus non-probate assets (generally, non-probate assets are automatically transferred to beneficiaries or joint owners and require less work on the part of the executor or administrator).
  • Whether there is real estate to be maintained or sold or multiple properties;
  • The number of separate financial institutions and separate assets or accounts;
  • The number of individuals involved, either as co-Executors or Administrators or as multiple heirs or beneficiaries;
  • Whether the participants get along and are agreeable, or whether their interactions are more like arguments, disagreements, and disputes.

Calculating Executor Fees in Pennsylvania

Lawyers and judges often use a graduated compensation schedule, although this has never been formally adopted under Pennsylvania law. This schedule is based on one used in the "In re:Johnson Estate" case. The "Johnson Estate" schedule is based on the estate size, asset types, and a declining percentage of the assets.

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Another rough rule of thumb that is sometimes cited is that an Executor or Administrator is entitled to 5% of the assets of the estate. This does not address the difference in work required between probate and non-probate assets but can help in estimating a fee that will later be determined by the Johnson Estate schedule. Here is an illustration of how the "In Re: Johnson" estate fee schedule results in a suggested fee amount for different size estates, and with different proportions of probate and non-probate assets.

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Other Payment Arrangements

At Marks Elder Law, we generally consider the amount calculated according to the chart as a guideline, and often discount and round down from that amount. Note: an agreed-upon fixed fee never covers the cost of any litigation. If a dispute, argument or disagreement arises that may require litigation, Marks Elder Law will be quoted separately before you decide to litigate.

Recently, in a Pennsylvania case that received widespread attention, a Judge criticized the "In Re Johnsen’s Estate" fee schedule as being out of date and no longer well suited for its purpose. In the case of Estate of James R. Donofri, the Judge proposed a simpler arrangement:

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If a proposed fee amount for an Executor or Administrator is challenged by the heirs or beneficiaries as excessive, it is very helpful for the fiduciary to be able to produce records of what they did to show that they have earned the compensation they are requesting. The ideal record would be a diary or log of activities and hours of work in sufficient detail to show the extent of work performed.

Finally, since an hourly rate for an Executor or Administrator must be reasonable and just, a judge might refer to the hourly rate that the person makes in their regular employment as a guideline, or refer to the hourly cost for labor or skilled services in the commercial marketplace (i.e. what would it cost to hire someone else to do the job). A skilled career professional would, therefore, be entitled to a higher “just and reasonable” hourly rate for services requiring or utilizing their skills, judgment, and expertise.

At Marks Elder Law, Our Fees Are Always Quoted in Advance

Generally, you never owe a fee until after we’ve agreed on one. Your fee reflects the time we spend working for you, the difficulty of your case, the value to you, the scale and scope of the matter, and the risk involved. Generally, we do not charge a Contingent Fee.

Reach out to our estate planning attorneys today! We will gladly review your will or estate plan to ensure it is up-to-date.
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